That leaves, as the pocketbook of last resort, the taxpayers.
In its latest financial statement, Pinnacle West declares it has the legal ability to unilaterally abrogate its agreement with the feds to keep MeraBank healthy. That means dumping it, at which point it becomes just another insolvent thrift taken over by the government. Abramson says he isn't sure the company's legal advisers are on firm ground. "I'm sure if they could have done that before, they would have," he says of divestiture. "And that [still] would not resolve the situation. It would put it into the courtroom."

Symington's stance is certainly welcomed by the owners of Pinnacle West--its shareholders. Joseph Castillo, chairman of the Pinnacle West Shareholders Association, is willing to concede that Pinnacle West will have to spend some money to make MeraBank healthier, with an eye toward selling it off. But he's not willing to hit up the company for anything like the $600 million--or more--it will take. "Anything over $150 million to $200 million is unreasonable," he says.

And if no one will take it for that price? Castillo goes along with the idea of Pinnacle West simply washing its hands of the thrift, which means a taxpayer bailout. Castillo, like Symington, has his own federal bogeymen to blame.

"There's been a problem with the regulators historically in this area to let things get as bad as they have been," Castillo says, citing the delays in federal takeover of Charles Keating's Lincoln Thrift as an example. "It's not entirely their fault," he adds. "Don't get me wrong."

Aside from ridding itself of the black hole, abandoning MeraBank--and letting the taxpayers pick up the tab--would have other advantages for Pinnacle West shareholders.

Pinnacle West stock is currently selling for about $12.50 a share. Analysts say that is based on the assumption that the company will have to put in more than $600 million to keep the thrift afloat. But Abramson says the "book value" of Pinnacle West stock without MeraBank is in "the low twenties."

Thus, Abramson figures, dumping MeraBank might be worth $10 a share to shareholders.

One of the big beneficiaries of such a move would be Pinnacle West president and CEO Keith Turley, who owns 18,607 shares according to a company statement issued in May. A $10-per-share hike would mean an instant profit of more than $180,000.

Raising the price of Pinnacle West stock also would help Turley do something with his now-worthless option of buying up to 67,671 shares--at $25.69 a share.

Henry Sargent Jr., the company's chief financial officer, also stands to benefit, with 10,389 shares and options on another 29,691 at $25.63 a share.

Other board members also would benefit. John Norton III, former deputy secretary of agriculture, holds 11,500 shares. And Circle K chairman Karl Eller, another director, has 1,154 shares.

All these men stand to make a lot more money by getting rid of MeraBank than any of the little old ladies that Symington professes to be protecting.

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